BUT that $1200 represented a 400% gain, paid my rent (which I was short for), and it took almost 5 years for bitcoin to come back to the same value. Would it have been better to wait until 2021? Yes. Was it a bad decision? Not at all.
It makes me think sometimes about how the right decision can still end up exploding in your face: it was the best decision with the information at your disposal at the time.
Nassim Taleb talks about this a lot – never risk ruin.
Because yes, on average it works out in the long run, but you are not average, you have 1 playthrough. Before you can win, you have to survive.
In hands themselves poker is played for "table stakes" (ie in a given hand you can only lose the chips that are in front of you at the beginning of that hand). Because of the table stakes rule, avoiding risk of ruin in poker is literally as simple as keeping some money as cash and not putting it on the table.
The thing that happens in movies where someone makes a bet their opponent can't call so they throw the deeds to their house/title to their gold mine/keys to their car into the pot literally can't happen in poker. You can only bet what you have on the table at the beginning of the hand and if you call all-in (all those chips) you get to see the hand to conclusion regardless of what the opponent bet.
Annie Duke (professional poker player) had a great book on this called "Thinking in Bets."
The main idea is that good decisions can create bad outcomes. And bad decisions can create good ones (because of luck).
So she suggests making decisions by calculating expected value like a poker player. And separating the outcome from the quality of the decision.
If you didn't pay rent, how would that have influenced your future to where you're at today?
400% Gain is a lot. How often do you think that 400% gains come arround, and how would you feel if the evaluation today was -50%?
I think the major lession here was: Have a backup reserve in which you can tap into to prevent from needing to liquidate higher risk assets.